How to make Performance Max focus on net new customers

23 June 2026 at 19:00

How to make Performance Max focus on net new customers

There’s a trap door waiting for DTC brands that invest in Google Ads that makes your dashboards look amazing, but absolutely wrecks your P&L.

It’s the danger of recycling traffic from Meta.

Thanks to the overlap between paid search and paid social traffic, running Google as a standalone channel is incredibly difficult if you don’t know how to set it up. Ad platforms refuse to share data with one another, and they love to claim credit for the same conversion — even if those sales would’ve happened without the influence of ads.

The DTC brands I speak to are often proud to show off their new customer numbers: month-over-month growth, a steady upward trend, and a fantastic dashboard. But when we go deeper into the data, we often find that a big chunk of those “new” customers are:

Conversions that would’ve happened because of brand or content efforts.
Customers who aren’t truly incremental because they consumed ads on multiple platforms.
The same people signing up with multiple email addresses.

You could argue that these overlapping sales still count as revenue, and they do. But when you look at the contribution margin from those sales, they cost far more than they should and erode actual profit.

In other words, you lose money when you run ads on both platforms without guardrails.

But that doesn’t mean you need to stop or limit yourself to one channel. Instead, you need a better system for measuring actual customer acquisition.

Why the new exclusions matter

If you’re spending five figures or more on Meta, TikTok, AppLovin, or any other top-of-funnel channel, you’ll want to minimize overlap with other channels to drive actual new customer acquisition.

Here’s what that looks like:

Someone sees your ad on Facebook or Instagram.
They visit your site, browse, and leave without buying.
A while later, they search for your brand on Google or get retargeted on YouTube.
Performance Max swoops in, grabs the conversion, and reports strong ROAS.
You may have won that order anyway, but now Google and Meta both want credit for it.

Now you’re paying two or more platforms to recycle a conversion that you might have earned with just one.

Ever since Performance Max launched, there wasn’t much you could do about this. It’s been a bit of a black box that automatically goes after the warmest traffic it can find: branded search, site visits, email subscriptions, and existing customers.

It lets you bid more for new customers, but you can’t really stop the campaign from defaulting to easy mode.

A while ago, Google began letting you exclude people searching for your brand on Search and Shopping. Performance Max still targeted warm audiences through YouTube, Gmail, and the Display Network.

The latest round of updates from Google has finally addressed this problem. You can now force Performance Max to focus on net new customer acquisition through a combination of brand exclusions, audience exclusions, and Customer Match data.

First-party audience exclusions, announced in March, are the final piece that makes this possible (though not foolproof – customer list matching is never perfect).

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A four-step framework for net new customer acquisition

Here’s a four-step framework we’re using at my agency to help clients maximize incrementality.

Step 1: Exclude your brand

This one has been around for a while, but it’s the foundation, so we have to start here.

For smaller brands, brand exclusions usually aren’t necessary. But once you’re spending real money and seeing more than 15% to 20% of your cost or revenue coming from brand searches, it’s time to take action.

There are two parts to this.

Go into your campaign settings and add a brand exclusion. If your brand isn’t already on the list, click New brand list, create one, and add your brand. Google will do its best to block branded queries from this list.

Because brand exclusions aren’t foolproof, go to the Keywords tab inside the campaign and add your brand name as a phrase match negative keyword. Add a few common variations, too. This catches anything the brand list misses.

If you’re excluding brand terms from Performance Max, you need a dedicated brand Search campaign and a brand Shopping campaign to capture those searches. Otherwise, you’re just leaving money on the table for competitors.

Step 2: Exclude website visitors and email subscribers

Even if you blocked brand searches, Performance Max would still retarget people who visited your website, opened your emails, or interacted with your brand on YouTube, Gmail, Discover, and Display. So even with brand exclusions in place, a big chunk of your spend still went to warm traffic.

Now you can change that. Go to your campaign settings and find the new audience exclusions option. Then build a few remarketing lists:

All website visitors: Set this up through the Google Ads pixel or Google Analytics. It captures anyone who has visited your site.
Email subscribers: Connect Klaviyo (or whatever ESP you’re using) directly to Google Ads. The benefit of the Klaviyo integration is that the audience updates in real time, so new subscribers are added automatically.

Once you exclude these audiences, Performance Max can only go after people who haven’t interacted with your brand in any meaningful way. What we typically do, and what I recommend, is to come up with an engagement metric that fits each account’s business goal, such as cart adds rather than visitors from the past seven days.

What a change from how this campaign type used to work.

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Step 3: Exclude existing purchasers

Same idea as Step 2, but specifically for people who have already bought from you. You can do this two ways.

Through a pixel-based audience that captures anyone who has triggered the purchase event.
By uploading your customer list directly. Shopify now lets you set up Customer Match lists right inside the Google Shopping app, and Klaviyo can do this, too.

Add these audiences to the exclusions section of your campaign, and you’re done.

A small caveat to keep in mind: audience matching is never 100%. If you upload a customer list of 1,000 people, Google might only match 900 of them. So you’ll still see some level of bleed. But going from “the campaign is targeting all my existing customers” to “the campaign is targeting maybe 10% of them” is still a huge win.

Step 4: Use ‘New Customer Bidding’ in campaign settings

The last piece is to tell the campaign explicitly that you want new customers.

In your campaign settings under customer acquisition, you’ll see two options: bid only for new customers, or bid higher for new customers. Both require you to connect a customer list (which you’ve probably already done by Step 3).

The “only new customers” option is the most aggressive setting. The campaign simply won’t bid on existing customers. Combined with the audience exclusions from Steps 2 and 3, this gets you as close to pure new customer acquisition as Performance Max will allow.

The “bid higher for new customers” option is more flexible. You set a dollar value that represents the additional value of a new customer, and the system bids more aggressively when it thinks an auction will result in one.

Here’s where you need to be careful. If you tell Google a new customer is worth an extra $100, and you get a $200 sale from a new customer, Google will report it as $300 in revenue. That extra $100 is a fictional reporting value, not real revenue. It will inflate your ROAS numbers and distort your target ROAS bidding.

Our recommendation is to use a small placeholder value, such as a penny or a dollar, when you want to nudge the system toward new customers without distorting your reporting. Or use a number that genuinely reflects the lifetime value premium of a new customer to your business.

What to expect from this approach

It’s still early, so we can’t draw firm conclusions yet. But based on my experience managing PPC for ecommerce brands, here’s what I expect to happen.

Many advertisers who walked away from Performance Max did so because it was simply recycling Meta traffic. By splitting it out, you force it to go after net new traffic.

This will likely benefit brands that don’t have a ton of video creative for YouTube, which is another platform where brands try to drive net new acquisition at the awareness stage.

One of the big differences between Performance Max and Demand Gen is that the former is much more conversion-focused. Any brand considering excluding branded Search and Shopping from Performance Max should also consider this tactic, as it tends to over-index on hot traffic.

In terms of outcomes, I expect the reported ROAS attributed to Performance Max to be lower than what you may have seen in the past.

But when you look at the breakdown of new versus returning customers, it should align much more closely with new customer acquisition. Without advanced configuration, it might be a 60/40 split, even in the best situations.

Limitations and realistic expectations

Nothing about this is foolproof. Audience exclusions don’t match perfectly. Brand exclusions don’t catch every variation. Customer Match has its gaps. So even with all four steps in place, some percentage of your spend will still hit warm audiences.

But for the first time, you actually have the levers to push Performance Max into upper-funnel territory. You can make it work like a real prospecting channel instead of a retargeting channel that takes credit for demand created elsewhere.

This matters most for brands spending heavily on Meta, TikTok, or other channels and wanting Google to actually grow the customer base rather than recycle the traffic those channels generate. If you’re seeing strong ROAS in Performance Max but flat new customer numbers month over month, this framework is for you.

If you’re a smaller brand still trying to find product-market fit or build initial momentum, this is probably overkill. Let Performance Max do its thing and pick up conversions without too many restrictions.

But once you’re scaling and the question is no longer “Can we be profitable?” but “Can we be profitable while growing the customer base?” these settings become some of the most important levers you have.

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The conversation around brand versus non-brand is everywhere. You can’t throw a dart at a paid media conference without hitting someone with a strong opinion on it. But for some reason, almost no one seems to be testing this new option.

I just finished auditing an account spending $100,000 a month on Search with no Performance Max or Shopping, so they get purely new customer acquisition. We looked at their numbers and said maybe now’s the time to try this, exclude all these segments, and let it rip.

So here’s when I recommend implementing this test: if your ad spend is high enough (it doesn’t need to be $100,000 a month or anywhere near it), or you’re revisiting Performance Max. Your hypothesis should be that this approach increases the proportion of actual new customer conversions.

I think you’ll find that the needle moves further than you think.

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